Hill v. Gateway 2000

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Hill v. Gateway 2000
Court U.S. Court of Appeals, 7th Circuit
Citation 105 F.3d 1147 (7th Cir. 1997)
Date decided 1997

Relevant Facts

The plaintiff ordered a computer on the phone from the defendant. Enclosed in the box of the computer was a list of terms to govern the purchase, including an arbitration clause and the statement that if the buyer did not agree to the terms then they should return the product. The plaintiff argued that they never truly read the terms, and that the terms do not constitute a valid contract, and filed a suit in federal court.


Procedural History

Defendant asked the court to enforce the arbitration clause, but the judge wrote that the record was insufficient to support a finding of a valid arbitration agreement between the parties and that the plaintiffs were not given an adequate notice of the arbitration clause.


Issues

Whether an arbitration clause can be included in the terms of a contract when the terms are never explicitly mentioned at the time of contract formation, but instead are enclosed in the purchased product with an offer to refund the purchase should the buyer disagree with the terms.


Holding/Decision

The decision of the district court is vacated and the decision is remanded with instructions to compel the plaintiffs to submit their dispute to arbitration.


Reasoning

Because they did not seek to discover the terms in advance and knew that the carton would contain some important terms, the plaintiffs must be bound to the arbitration clause when they did not return the product within the allotted time, for their acceptance of the product and enclosed terms represented an acceptance of the contract.